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BFD Expert Voices - Climate Deals

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Google's data center goal

Illustration of Google's logo with the Earth replacing one of the "o"'s.

The BFD: Material impact

Illustration of a sack of money made out of concrete

Solar poster child

A solar farm built near Austin, Texas by SB Energy and selling electricity to Google

A group of solar farms built near Austin, Texas, by SB Energy is selling electricity to Google's operations in the state. Photo: Courtesy of SB Energy

Temperature check

Illustration of an earth in a roast pan with a meat thermometer.

Hot deals

It's personnel

Acronym of the day: BYOP

Google is making progress on its difficult goal to run its data centers on local, around-the-clock clean energy.

Why it matters: The tech giant's emissions jumped by almost half over the past five years partly due to the energy required to fuel its AI ambitions.

Driving the news: Executives from Google, the Department of Energy, and SoftBank-backed SB Energy held a launch event at a sprawling 900 MW solar farm last Friday near Austin, Texas.

The project, which represents Google's largest solar deal of its kind, is currently powering the company's data center in Midlothian, Texas, and its cloud region in Dallas. The company is investing $1 billion into expanding data centers in the state.

At the event, Google's Ben Sloss, whose title is VP of 24/7 and capacity, said projects like this one "are really critical" to help Google reach its goal of powering all of its data centers with regional, around-the-clock, carbon-free energy.

Catch up quick: When Google announced its goal of powering 100% of its operations with clean energy in 2018, the company realized that utilities still kept coal or gas plants online to meet its load, said Google's Caroline Golin at the virtual SOSV Climate Summit last Thursday. The load was "completely disconnected."

Golin said the geographic and hourly criteria forced Google to "get engaged where we are," striking important partnerships and leading to more innovative thinking.

The intrigue: The geography part of the goal is pretty straightforward, albeit hard. It's the time-matching that could be particularly tricky.

To help with the task, energy firm LevelTen Energy, with support from Google and Microsoft, launched a marketplace for "granular certificates." The idea is that data center operators could buy them for blocks of time when the sun and wind aren't producing power.

LevelTen Energy's Katie Soroye, VP of Granular Procurement Solutions, said there's ongoing momentum for granular certificates, and the market could kick off in early 2025.

Reality check: The 24/7 goal will be challenging to meet, noted Chris Seiple, Wood Mackenzie's vice chairman of its Power & Renewables group.

Google's Sloss called the goal "a much harder bar," requiring a lot of generation capacity and storage capacity.

What's next: Google is increasingly interested in advanced clean energy technologies beyond wind and solar — like geothermal, SMRs and storage — to help meet that 24/7 goal.

1 big thing: Google's data center goal

CRH Ventures, the investment arm of building materials maker CRH, this morning announced it's launched an accelerator aimed at backing green startups in the sector.

Why it's the BFD: The Sustainable Building Materials accelerator says it has access to a $250 million Venturing and Innovation Fund that invests in climate tech and construction startups. 

Context: Startups have struggled to develop sustainable alternatives that can compete on cost with cement and other legacy materials.

Stunning stat: Construction and building materials production generate 37% of global greenhouse gas emissions. Cement and concrete manufacturing account for up to 9% of emissions.

Reality check: Low-carbon cement commonly costs twice as much as conventional material. 

Driving the news: CRH Ventures plans to back five to six startups working to produce competitive alternatives. 

Zoom in: Its accelerator is targeting companies developing novel materials, sustainable binders that can improve cement or concrete performance, and materials that incorporate CO2 into manufacturing.

The latest: CRH Ventures declined to share how much capital it's allocating toward the accelerator. 

Yes, but: The venture arm has set its sights beyond R&D, aiming to propel startups toward initial production.

"They expect to ... have their pilot operations fully funded by the $250 million fund," a spokesperson tells Axios. "They're not scared of pilot programs that call for large amounts of capital."

👀 What we're watching: We'll be interested to see not simply which startups get accepted when applications close Dec. 16, but what becomes of their technology a year or two from now. 

2. The BFD: Material impact

The massive Texas solar farm featured in today's 1 big thing is important for Google and also the Department of Energy's plan to boost domestic solar manufacturing.

Why it matters: The projects are expected to be the first ones to qualify for the domestic content bonus credit enacted by the Inflation Reduction Act.

Zoom in: The three projects will use modules made by First Solar in Ohio, as well as gear from Nextracker and local steel produced in Midlothian, Texas.

At the event on Friday, Energy Secretary Jennifer Granholm called the solar farms "the poster child project of what we wanted to see when the Biden/Harris administration came in and started to design this industrial strategy for America."

The projects are eligible for the standard 30% clean energy tax credit, another 10% credit for the American-made hardware, and another 10% credit for building the project near a former coal community. The 50% worth of incentives "makes this project irresistible," said Granholm. 

The Biden administration's Inflation Reduction Act (IRA) extended the tax credits for clean energy projects and also enacted the domestic content bonus credit and the energy communities bonus credit. 

The big picture: For clean energy project developers and investors, designing and backing projects that can take advantage of the extra IRA credits is key. 

What's next: It'll take time for domestic suppliers to ramp up manufacturing to meet any additional demand from these content bonus projects. 

3. Solar poster child

📉 Shorting climate tech: Hedge funds are on average net short on batteries, solar, EVs and hydrogen, and also long on oil, coal and gas, reports Bloomberg.

Clean energy and climate tech stocks have lagged the broader market over the last three years. 

The exception: hedge funds are bullish on wind and power infrastructure. 

⚡ +/- motors: New startups and engineers are taking another look at electrostatic motors which use alternating positive and negative charges to spin an axle, reports the Wall Street Journal.

One startup, C-Motive Technologies, is a startup founded by a pair of University of Wisconsin engineers. 

Another research group is led by a professor of electrical engineering at Beihang University in Beijing.

🔌 Overblown energy fears: Google data center architect Urs Hölzle tells Latitude Media that he thinks technical solutions will slash AI's energy use.

"The world is not static. ... Pretty much every new time we're building a new version of Gemini, that version is substantially more efficient in its training or in its serving than the previous one," says Hölzle.

4. Temperature check

• Carbon Robotics, a Seattle developer of agricultural robots, raised a $70m Series D led by Bond Capital, joined by NVentures, Anthos Capital, Fuse Venture Capital, Ignition Partners, Revolution, Sozo Ventures, and Voyager Capital. Go deeper

• RIFT, a Dutch developer of "iron fuel" tech, raised €11m in Series A funding co-led by PGGM, Invest-NL and Oost and joined by Rubio Impact Ventures, the Energy Transition Fund Rotterdam, and Brabant Development Agency. Go deeper

• Bungalow Capital, a pre-seed firm, is raising up to $50m for its third fund, per a filing. Go deeper

• Rabbit Mobility, an Egyptian micro-mobility network, raised $1.3m led by 500 Global and Untapped Global. Go deeper

• Flux Power, the Vista, Calif., energy storage developer, received a Nasdaq noncompliance warning for failing to file its 10-K annual report for FY24. Go deeper

• Italian energy giant Eni has hired the French investment bank Natixis to sell a 49% stake in biomethane arm Enibioch4in, which is controlled by Enilive. Go deeper

• Sage Sustainable Electronics, an IT asset disposition provider based in Columbus, Ohio, has acquired Relectro, a second life electronics management company based in Telford, Pennsylvania. Go deeper

• Swedish steelmaker SSAB is set to receive €128m in Swedish state aid to decarbonize. Go deeper

• Italian graphene producer Be Dimensional secured €20m in debt from the European Investment Bank. Go deeper

• TurnOnGreen, a Milpitas, Calif., power products supplier, has received $2.2m in orders from an undisclosed defense contractor to power conversion modules and control systems for military vehicles. Go deeper

• Kentucky utilities Louisville Gas & Electric and Kentucky Utilities, subsidiaries of Allentown, Pa., energy firm PPL, proposed pausing new utility-scale solar through 2035 in favor of two natural gas plants plus battery storage. Go deeper

• Energy Vault, the Westlake Village, Calif., gravity-based energy storage developer, signed an agreement with Australian energy developer Enervest to deploy a 1,000 MWh battery energy storage system in New South Wales, Australia. Go deeper

• Spanish oil giant Repsol has paused 350 MW in green hydrogen projects there, citing unfavorable regulations, per Reuters. Go deeper

• Mercedes-Benz opened a battery recycling plant with Primobius, a JV between German engineering firm SMS and Australian process tech developer Neometals, in Germany. Go deeper

• Italy's government plans to unveil a state-backed advanced nuclear reactor developer, as the country's conservative leadership prepares to overhaul a nuclear power ban, per Reuters. Go deeper

• Vietnam and Taiwan's governments are considering nuclear power to meet electricity demand. Go deeper

5. Hot deals

• Sarah Kapnick joined J.P. Morgan as global head of climate advisory. Kapnick was previously chief scientist at National Oceanic and Atmospheric Administration. Go deeper

• Nazo Moosa joined Paladin Capital Group, a D.C. investment firm focused on cybersecurity and safety, as managing director in its London office. Moosa was previously managing partner at Energy Impact Partners in London. Go deeper

6. It's personnel

Why it matters: Energy Secretary Granholm used the phrase last week to describe what data center operators need to do in the U.S. when building new facilities. 

October 21, 2024

1 big thing: Google's data center goal